Written Commentary
SOYBEANS
Beans are starting the week on a slightly stronger note, with some weather concerns in South America and a gap lower overnight in the US dollar keeping the edge with the bulls. The dollar sold off sharply on Friday and is extending the decline this morning, hitting its lowest level since late September.
SOYBEAN MEAL
Soymeal is pulling back after hitting a 2-week high overnight, despite a 4-month low in the US dollar today. Board crush hit its highest level since August 2025. The harsh winter weather over the weekend has no doubt affected crush operations across the Plains and in the Midwest, although widespread plant shutdowns have not yet been confirmed. As temperatures begin to moderate this week in western regions, the full scope of lost capacity should become clearer, but early estimates suggest the weather event may have trimmed roughly 3 million bushels from near-term crush, resulting in imbalances in meal distribution.
CORN
Following a strong finish last week, corn prices are starting steady to slightly lower this morning as the US dollar falls to a 4-month low.
The market could not ignore the massive weekly export sales report on Friday, highlighting a bullish demand tone. Unknown was the largest buyer in last week’s sales report, and the export number was easily a marketing year high
WHEAT
Extreme weather over the weekend and lingering bitterly cold temperatures favor the bulls to start the week, following a strong finish last week. Significant snow totals across parts of the southern Plains offer a boost to soil moisture, but areas without snow cover from Montana southeast through central Nebraska pose a high risk of winterkill. The extended 6-14 day outlook shows limited follow-up precipitation for the Plains, with temperatures warming in the northern Plains but staying cooler than average in the southern regions.
CATTLE
Extreme weather and strong cash prices are likely to provide support at the opening this morning as cattle stress remains high with lingering bitterly cold temperatures. Friday’s Cattle on Feed report may be a slight headwind today as placements were above expectations, but on feed and marketing numbers were right at trade forecasts. Beef in cold storage, however, came in at its lowest December since 2009. COT data showed the managed money net long position was unchanged at just under 102,000 contracts for live cattle. Feeders were also little changed at just over 16,000 net long.
HOGS
April hogs had a quiet, low-volume day on Friday after gapping to new highs on Thursday morning. COT data showed Managed Money traders bought nearly 15,000 contracts, pushing their net long up to 97,400. Open interest also rose more than 4,000 contracts on Friday, continuing the steady increase seen over the last 2 weeks. Prices may continue higher this morning after pork supplies in cold storage on Friday were the lowest for December since 1997. Furthermore, the US dollar hit a four-month low this morning, and the bulls retain control.
MILK CLASS III
February Class III milk finished last week with a moderate gain after reaching a 2 1/2-week high on Wednesday and a 1 1/2-week low on Friday.
ENERGIES
Crude oil price were higher early Monday on concerns that shut-ins in major crude producing areas in the US due to the winter storm would slow oil flows, but the market slipped to lower on the day as the session progressed. JPMorgan analysts said estimated that about 250,000 barrels per day of crude production had been lost due to the weather, including declines in the Bakken field in Oklahoma and parts of Texas. The Baker Hughes rig count showed US oil rigs in operation were up 1 rig to 411 last week. This was down from 478 rigs a year ago and below the five-year average of 474. Rigs in operation are the lowest for this point in the season since 2021.
March Natural Gas extended its rally early Monday, reaching its highest level since December 8, after the winter storm and extreme cold arrived as expected over the weekend. The nearby contract reached its highest level since December 2022. On Saturday, US Energy Secretary Chris Wright issued an emergency order after grid operator PJM reported possible problems in meeting electricity demand. PJM is based outside of Philadelphia. There are also concerns about equipment freezing, causing interruptions in output. That and higher demand is expected to produce some significant withdrawals in US supply over the next couple of weeks. The latest 6-10-day forecast still shows below and much normal temperatures covering an area from Texas to New England.
DOLLAR INDEX
The USD index is lower as traders sell the dollar ahead of the Fed’s meeting on Wednesday, where the bank is likely to stand pat and issue guidance in line with previous remarks that policy moves will depend on how economic data evolves. The dollar is falling strongest against the yen, as speculation that a joint US-Japan currency intervention move could happen in the coming days following Friday’s spike in the currency and recent comments from several Japanese government officials.
COCOA
March Cocoa was higher early Monday after falling to another new contract low on Friday. The market came under severe pressure last week in the wake of disappointing fourth-quarter grind data out of Europe and Asia and then on reports of heavy supplies arriving at ports in Ivory Coast. The grind numbers had been released the previous week but the repercussions carried through the market all last week. The International Cocoa Organization last week estimated global stocks at 1.32 million tons at the end of the 2024/25 season last September versus 1.27 million tons the previous year.
COFFEE
March Coffee was higher early Monday as it continued its climb off last week’s lows. The market has been inside a trading rang for the past several months, and last week it had another failed attempt to break though the bottom. Warly forecasts for 2026/27 Brazilian production are coming in, with Sucden projecting 72.5 million bags of arabica and robusta combined. This would be up from 64 million in 2025/26. They look for arabica production to reach 47.5 million bags, up from 39 million in 2025/26, with robusta output expected to be unchanged at 25 million. Harvest begins in April or May.
COTTON
March Cotton sold off sharply overnight and was close to taking out the contract low from December at 62.97. The winter storm is bringing much needed moisture to the US cotton belt but it is also disrupting sales. Democrats in the US senate are threatening to vote against funding legislation that includes money for the Homeland Security Department that oversees ICE in the wake of the shooting over the weekend in Minneapolis, with raises the risk of a partial shutdown.
SUGAR
March Sugar was moderately higher early Monday but inside the lower end of Friday’s selloff. There was some additional evidence last week that low sugar prices will discourage production in 2026/27, with the Brazilian sugarcane growers’ association Orplana saying last week that farmers are reducing their investments due to low prices and high costs of production. Strong Asian production for 2025/26 leaves an overhang, and there is still a large surplus expected. India may be waiting in the wings with an exportable surplus. El Nino is expected to arrive later this year, but the question is whether it will arrive on time (and be strong enough) to reduce monsoon rainfall for Thailand or India.
PRECIOUS METALS
Gold prices are higher, once again hitting record highs as the metal crossed $5,000 an ounce. Gold crossed the $5,000 threshold overnight, extending its historic rally investors continue to flock to safe havens amid a sharply lower dollar and rising geopolitical tensions after President Trump threatened Canada with a 100% tariff if it follows through with its trade deal with China.
Silver futures are up over 8% as the metal surpassed the $100 level for the first time. Silver is benefitting from safe-haven flows and a structural supply-demand deficit thanks to its role in various technologies.
Copper prices hit a one-week high on the LME as market focus shifts back to demand expectations amid supply disruptions. Benchmark three-month copper on the LME was up 1% at $13,245. Concerns regarding supply disruptions over the past 12 months continue to support prices as forecasts of soaring demand from AI datacenters points to elevated long-term demand.
EQUITIES
The S&P and Dow traded flat, while the Nasdaq led the downside as markets prepare for one of the busiest weeks of the year regarding economic data and corporate earnings. Last week’s geopolitical headlines created sharp volatility that lead to a wave of selling in American assets. President Trump and Europe’s leaders agreed on the “framework” of a deal over Greenland, but the events revealed a growing divide between the US and some of its major Western allies.
INTEREST RATES
Yields are lower across the curve to start the week ahead of the Fed’s policy decision on Wednesday. The bank is likely to hold on any rate moves. We expect Chair Powell to emphasize that future policy moves will depend on how economic data evolves. Recent data has suggested that labor conditions are stable, with no meaningful uptrends in unemployment figures in both the nonfarm payrolls and JOLTS reports. Additionally, weekly initial claims data has been rather bland, with no indications of any major uptick in joblessness or layoffs, as the four-week MA of continued claims has continued its downtrend since early November.
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